I own one property in the state of Illinois, a single-family home currently being rented. When our tenants renewed their lease, they were having financial issues and, having been there ourselves, we were sympathetic. When they asked if they could pay their rent in installments, we agreed, but since they were not paying in full on the due date, we would include the late fee into their payment schedule. Now, they are behind and we are perusing payment.
Our tenant stated they spoke to an attorney who told them that they did not have to pay the late fee, just the rent according to the schedule. Although the lease states a specific date that the rent must be paid prior to a late fee and we agreed to allow installments only if they included the late fee, they state that they do mot have to pay that fee.
Yes, we made a stupid decision. Lesson learned. Does anyone have a story they can share, or let us know if the built-in late fee portion was not allowed in Illinois? We researched before allowing this, and didn't see where it was prohibited, but perhaps we missed something.
Thank you all!
It sounds like time to issue a 5 day notice and evict the residents. When you file for eviction include the late fees. The judge will make a decision on the late fees one way or the other. Their decision will be based upon how well your lease is written.
Don't try to solve it. Start the eviction process immediately. The judge will give them enough time to move out.
Welcome to BP.
Your tenants are correct unfortunately. You can't force the tenants to pay late fees during 5 day process. It would have to be separate motion. Judge will throw any late fees, NSF and other fees during eviction process.
I had just sent a colleague request to you. You are welcome to contact / call me.
Thank you for your replies. I'm still a little confused. Even though it is written into the lease that they must pay the late fee incorporated into the installments as a condition of being able to make installments in the first place, they don't HAVE to pay the late fee?
@Shannon Gauthier In VT, landlords cannot charge late fees, period. The way some people write leases states "If rent is paid on or before the 1st of the month it is $800" and "If rent is paid after the 1st it should be paid in full at $900" ... it's not a "late fee" but a timely payment "discount" -- may be useful if late fees aren't allowed in Illinois.
Why not ask for the attorney's info so you can talk to them, or talk to your own ... maybe tenant is bluffing. Either way, as others have stated, sounds like an eviction is coming.
@Shannon Gauthier Late fees cannot be included in the 5 day notice, nor can payments towards security deposits, or utilities, or anything like that. Just rent. However, many leases state that if rent is not paid after the grace period (usually 5 days), $x will be due as additional rent. When that is the case, the "late fee" can be included because its not defined as a fee, its rent. But again, if your lease simply defines that charge as a fee and not specifically as additional rent, it cannot be included in the 5 day notice.
Note that once you issue the 5 day notice, if you accept partial payment, you will have to re-issue another 5 day notice for the new amount.